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38. Rejection of Offer by Counter-Offer (Restatement First) 40. Time When Rejection or Counter-offer Terminates the Power of Acceptance 41. Lapse of Time 42. Revocation by Communication from Offeror Received by Offeree 43. Indirect Communication of Revocation 45. Option Contract Created by Part Performance or Tender 46. Revocation of General Offer 48. Death or Incapacity of Offeror or Offeree 50. Acceptance of Offer Defined; Acceptance by Performance; Acceptance by Promise 51. Effect of Part Performance Without Knowledge of Offer 52. Who May Accept an Offer 53. Acceptance by Performance; Manifestation of Intention Not to Accept 54. Acceptance by Performance; Necessity of Notification to Offeror 55. Acceptance of Non-Promissory Offers 56. Acceptance by Promise; Necessity of Notification to Offeror 58. Necessity of Acceptance Complying with Terms of Offer 59. Purported Acceptance Which Adds Qualifications 60. Acceptance of Offer Which States Place, Time or Manner of Acceptance 61. Acceptance Which Requests Change of Terms 62. Effect of Performance by Offeree Where Offer Invites Either Performance or Promise 63. Time When Acceptance Takes Effect 66. Acceptance Must be Properly Dispatched 69. Acceptance by Silence or Exercise of Dominion CHAPTER 4 FORMATION OF CONTRACTSCONSIDERATION 71. Requirement of Exchange; Types of Exchange 73. Performance of Legal Duty 74. Settlement of Claims 77. Illusory and Alternative Promises 79. Adequacy of Consideration; Mutuality of Obligation 81. Consideration as Motive or Inducing Cause 82. Promise to Pay Indebtedness; Effect on the Statute of Limitations 83. Promise to Pay Indebtedness Discharged in Bankruptcy
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84. Promise to Perform a Duty in Spite of Non-occurrence of a Condition 86. Promise for Benefit Received 87. Option Contract 89. Modification of Executory Contract 90. Promise Reasonably Inducing Action or Forbearance 90. Promise Reasonably Inducing Definite and Substantial Action (Restatement First) 95. Requirements for Sealed Contract or Written Contract or Instrument CHAPTER 5 THE STATUTE OF FRAUDS 131. General Requisites of a Memorandum 132. Several Writings 139. Enforcement by Virtue of Action in Reliance CHAPTER 6 MISTAKE 151. Mistake Defined 152. When Mistake of Both Parties Makes a Contract Voidable 153. When Mistake of One Party Makes a Contract Voidable 154. When a Party Bears the Risk of a Mistake 155. When Mistake of Both Parties as to Written Expression justifies Reformation 157. Effect of Fault of Party Seeking Relief 158. Relief Including Restitution CHAPTER 7 MISREPRESENTATION, DURESS AND UNDUE INFLUENCE 161. When Non-Disclosure Is Equivalent to an Assertion 162. When a Misrepresentation Is Fraudulent or Material 164. When a Misrepresentation Makes a Contract Voidable 167. When a Misrepresentation Is an Inducing Cause 169. When Reliance on an Assertion of Opinion Is Not justified 174. When Duress by Physical Compulsion Prevents Formation of a Contract 175. When Duress by Threat Makes a Contract Voidable 176. When a Threat Is Improper 177. When Undue Influence Makes a Contract Voidable CHAPTER 8 UNENFORCEABILITY ON GROUNDS OF PUBLIC POLICY
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178. When a Term Is Unenforceable on Grounds of Public Policy 181. Effect of Failure to Comply with Licensing or Similar Requirement 182. Effect of Performance if Intended Use Is Improper 187. Non-Ancillary Restraints on Competition 188. Ancillary Restraints on Competition 194. Promise Interfering with Contract with Another 195. Term Exempting from Liability for Harm Caused Intentionally, Recklessly or Negligently 198. Restitution in Favor of Party who Is Excusably Ignorant or Is Not Equally in the Wrong CHAPTER 9 THE SCOPE OF CONTRACTUAL OBLIGATIONS 201. Whose Meaning Prevails 202. Rules in Aid of Interpretation 203. Standards of Preference in Interpretation 204. Supplying an Omitted Essential Term 205. Duty of Good Faith and Fair Dealing 206. Interpretation Against the Draftsman 208. Unconscionable Contract or Term 209. Integrated Agreements 210. Completely and Partially Integrated Agreements 211. Standardized Agreements 213. Effect of Integrated Agreement on Prior Agreements (Parol Evidence Rule) 214. Evidence of Prior or Contemporaneous Agreements and Negotiations 215. Contradiction of Integrated Terms 216. Consistent Additional Terms 217. Integrated Agreement Subject to Oral Requirement of a Condition 220. Usage Relevant to Interpretation 221. Usage Supplementing an Agreement 222. Usage of Trade 223. Course of Dealing 224. Condition Defined 225. Effects of the Non-Occurrence of a Condition 226. How an Event May Be Made a Condition 227. Standards of Preference with Regard to Conditions
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228. Satisfaction of the Obligor as a Condition 229. Excuse of a Condition to Avoid Forfeiture CHAPTER 10 PERFORMANCE AND NON-PERFORMANCE 234. Order of Performances 235. Effect of Performance as Discharge and of Non-Performance as Breach 236. Claims for Damages for Total and for Partial Breach 237. Effect on Other Party's Duties of a Failure to Render Performance 238. Effect on Other Party's Duties of a Failure to Offer Performance 240. Part Performances as Agreed Equivalents 241. Circumstances Significant in Determining Whether a Failure Is Material 242. Circumstances Significant in Determining When Remaining Duties are Discharged 243. Effect of a Breach by Non-Performance as Giving Rise to a Claim for Damages for Total Breach 250. When a Statement or an Act Is a Repudiation 251. When a Failure to Give Assurance May Be Treated as a Repudiation 252. Effect of Insolvency 253. Effect of a Repudiation as a Breach and on Other Party's Duties 256. Nullification of Repudiation or Basis for Repudiation 257. Effect of Urging Performance in Spite of Repudiation CHAPTER 11 IMPRACTICABILITY OF PERFORMANCE AND FRUSTRATION OF PURPOSE 261. Discharge by Supervening Impracticability 262. Death or Incapacity of Person Necessary for Performance 263. Destruction, Deterioration or Failure to Come into Existence of Thing Necessary for Performance 265. Discharge by Supervening Frustration 266. Existing Impracticability or Frustration 272. Relief Including Restitution CHAPTER 12 DISCHARGE BY ASSENT OR ALTERATION 281. Accord and Satisfaction 285. Contract Not to Sue 286. Alteration of Writing CHAPTER 13
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JOINT AND SEVERAL PROMISORS AND PROMISEES 288. Promises of the Same Performance 293. Effect of Performance or Satisfaction on Co-promisors 294. Effect of Discharge on Co-promisors CHAPTER 14 CONTRACT BENEFICIARIES 302. Intended and Incidental Beneficiaries 309. Defenses Against the Beneficiary 311. Variation of a Duty to a Beneficiary 313. Government Contracts CHAPTER 15 ASSIGNMENT AND DELEGATION 317. Assignment of a Right 318. Delegation of Performance of Duty 319. Delegation of Performance of Condition 321. Assignment of Future Rights 322. Contractual Prohibition of Assignment 328. Interpretation of Words of Assignment; Effect of Acceptance of Assignment 331. Partially Effective Assignments 332. Revocability of Gratuitous Assignments 336. Defenses Against an Assignee CHAPTER 16 REMEDIES 344. Purposes of Remedies 346. Availability of Damages 347. Measure of Damages in General 348. Alternatives to Loss in Value of Performance 349. Damages Based on Reliance Interest 350. Avoidability as a Limitation on Damages 351. Unforeseeability and Related Limitations on Damages 352. Uncertainty as a Limitation on Damages 353. Loss Due to Emotional Disturbance 354. Interest as Damages 355. Punitive Damages 356. Liquidated Damages and Penalties
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359. Effect of Adequacy of Damages 360. Factors Affecting Adequacy of Damages 370. Requirement That Benefit Be Conferred 371. Measure of Restitution Interest 373. Restitution When Other Party Is in Breach 374. Restitution in Favor of Party in Breach 375. Restitution When Contract Is Within Statute of Frauds 376. Restitution When Contract Is Voidable 377. Restitution in Cases of Impracticability, Frustration, Non-Occurrence of Condition or Disclaimer by Beneficiary
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14. Infants
Unless a statute provides otherwise, a natural person has the capacity to incur only voidable contractual duties until the beginning of the day before the person's eighteenth birthday.
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(a) he is unable to understand in a reasonable manner the nature and consequences of the transaction, or (b) he is unable to act in a reasonable manner in relation to the transaction.
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33. Certainty
(1) Even though a manifestation of intention is intended to be understood as an offer, it cannot be accepted so as to form a contract unless the terms of the contract are reasonably certain. (2) The terms of a contract are reasonably certain if they provide a basis for determining the existence of a breach and for giving an appropriate remedy. (3) The fact that one or more terms of a proposed bargain are left open or uncertain may show that a manifestation of intention is not intended to be understood as an offer or as an acceptance.
38. Rejection
(1) An offeree's power of acceptance is terminated by his rejection of the offer, unless the offeror has manifested a contrary intention.
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(2) A manifestation of intention not to accept an offer is a rejection unless the offeree manifests an intention to take it under further advisement.
39. Counter-offers
(1) A counter-offer is an offer made by an offeree to his offeror relating to the same matter as the original offer and proposing a substituted bargain differing from that proposed by the original offer. (2) An offeree's power of acceptance is terminated by his making of a counteroffer, unless the offeror has manifested a contrary intention or unless the counteroffer manifests a contrary intention of the offeree. [The predecessor of 39 is 38 of the First Restatement. It read as follows:
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62. Effect of Performance by Offeree Where Offer Invites Either Performance or Promise
(1) Where an offer invites an offeree to choose between acceptance by promise and acceptance by performance, the tender or beginning of the invited performance or a tender of a beginning of it is an acceptance by performance. (2) Such an acceptance operates as a promise to render complete performance.
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(a) Where an offeree takes the benefit of offered services with reasonable opportunity to reject them and reason to know that they were offered with the expectation of compensation. (b) Where the offeror has stated or given the offeree reason to understand that assent may be manifested by silence or inaction, and the offeree in remaining silent and inactive intends to accept the offer. (c) Where because of previous dealings or otherwise, it is reasonable that the offeree should notify the offeror if he does not intend to accept. (2) An offeree who does any act inconsistent with the offeror's ownership of offered property is bound in accordance with the offered terms unless they are manifestly unreasonable. But if the act is wrongful as against the offeror it is an acceptance only if ratified by him.
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(b) the forbearing or surrendering party believes that the claim or defense may be fairly determined to be valid. (2) The execution of a written instrument surrendering a claim or defense by one who is under no duty to execute it is consideration if the execution of the written instrument is bargained for even though he is not asserting the claim or defense and believes that no valid claim or defense exists.
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(c) A statement to the obligee that the statute of limitations will not be pleaded as a defense.
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(b) is made irrevocable by statute. (2) An offer which the offeror should reasonably expect to induce action or forbearance of a substantial character on the part of the offeree before acceptance and which does induce such action or forbearance is binding as an option contract to the extent necessary to avoid injustice.
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(2) When a statute provides in effect that a written contract or instrument is binding without consideration or that lack of consideration is an affirmative defense to an action on a written contract or instrument, in order to be subject to the statute a promise must either (a) be expressed in a document signed or otherwise assented to by the promisor and delivered; or (b) be expressed in a writing or writings to which both promisor and promisee manifest assent.
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(d) the reasonableness of the action or forbearance; (e) the extent to which the action of forbearance was foreseeable by the promisor.
CHAPTER 6 MISTAKE
151. Mistake Defined
A mistake is a belief that is not in accord with the facts.
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(b) reasonably believes that, as compared with himself, the person whose opinion is asserted has special skill, judgment or objectivity with respect to the subject matter, or (c) is for some other special reason particularly susceptible to a misrepresentation of the type involved
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(2) If a party's manifestation of assent is induced by undue influence by the other party, the contract is voidable by the victim. (3) If a party's manifestation of assent is induced by one who is not a party to the transaction, the contract is voidable by the victim unless the other party to the transaction in good faith and without reason to know of the undue influence either gives value or relies materially on the transaction.
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195. Term Exempting from Liability for Harm Caused Intentionally, Recklessly or Negligently
(1) A term exempting a party from tort liability for harm caused intentionally or recklessly is unenforceable on grounds of public policy. (2) A term exempting a party from tort liability for harm caused negligently is unenforceable on grounds of public policy if (a) the term exempts an employer from liability to an employee for injury in the course of his employment; (b) the term exempts one charged with a duty of public service from liability to one to whom that duty is owed for compensation for breach of that duty, or
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(c) the other party is similarly a member of a class protected against the class to which the first party belongs. (3) A term exempting a seller of a product from his special tort liability for physical harm to a user or consumer is unenforceable on grounds of public policy unless the term is fairly bargained for and is consistent with the policy underlying that liability.
198. Restitution in Favor of Party who Is Excusably Ignorant or Is Not Equally in the Wrong
A party has a claim in restitution for performance that he has rendered under or in return for a promise that is unenforceable on grounds of public policy if (a) he was excusably ignorant of the facts or of legislation of a minor character, in the absence of which the promise would be enforceable, or (b) he was not equally in the wrong with the promisor.
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(4) Where an agreement involves repeated occasions for performance by either party with knowledge of the nature of the performance and opportunity for objection to it by the other, any course of performance accepted or acquiesced in without objection is given great weight in the interpretation of the agreement. (5) Wherever reasonable, the manifestations of intention of the parties to a promise or agreement are interpreted as consistent with each other and with any relevant course of performance, course of dealing, or usage of trade.
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236. Claims for Damages for Total and for Partial Breach
(1) A claim for damages for total breach is one for damages based on all of the injured party's remaining rights to performance. (2) A claim for damages for partial breach is one for damages based on only part of the injured party's remaining rights to performance.
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(c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture; (d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances; (e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing.
243. Effect of a Breach by Non-Performance as Giving Rise to a Claim for Damages for Total Breach
(1) With respect to performances to be exchanged under an exchange of promises, a breach by non-performance gives rise to a claim for damages for total breach only if it discharges the injured party's remaining duties to render such performance, other than a duty to render an agreed equivalent under 240. (2) Except as stated in Subsection (3), a breach by non-performance accompanied or followed by a repudiation gives rise to a claim for damages for total breach. (3) Where at the time of the breach the only remaining duties of performance are those of the party in breach and are for the payment of money in installments not related to one another, his breach by non-performance as to less than the whole, whether or not accompanied or followed by a repudiation, does not give rise to a claim for damages for total breach. (4) In any case other than those stated in the preceding subsections, a breach by non-performance gives rise to a claim for total breach only if it so substantially impairs the value of the contract to the injured party at the time of the breach that it is just in the circumstances to allow him to recover damages based on all his remaining rights to performance.
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(2) The effect of events other than a statement as constituting a repudiation under 250 or the basis for a repudiation under 251 is nullified if, to the knowledge of the injured party, those events have ceased to exist before he materially changes his position in reliance on the repudiation or indicates to the other party that he considers the repudiation to be final.
263. Destruction, Deterioration or Failure to Come into Existence of Thing Necessary for Performance
If the existence of a specific thing is necessary for the performance of a duty, its failure to come into existence, destruction, or such deterioration as makes performance impracticable is an event the non-occurrence of which was a basic assumption on which the contract was made.
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(3) A contract not to sue one co-obligor bars levy of execution on the property of the promisee during the agreed time but does not bar an action or the recovery of judgment against any co-obligor.
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(3) Any consideration received by the obligee for discharge of one promisor discharges the duty of each other promisor of the same performance to the extent of the amount or value received. An agreement to the contrary is not effective unless it is made with a surety and expressly preserves the duty of his principal.
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(3) Such a power terminates when the beneficiary, before he receives notification of the discharge or modification, materially changes his position in justifiable reliance on the promise or brings suit on it or manifests assent to it at the request of the promisor or promisee. (4) If the promisee receives consideration for an attempted discharge or modification of the promisor's duty which is ineffective against the beneficiary, the beneficiary can assert a right to the consideration so received. The promisor's duty is discharged to the extent of the amount received by the beneficiary.
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(b) as security for or in total or partial satisfaction of a pre-existing debt or other obligation.
CHAPTER 16 REMEDIES
344. Purposes of Remedies
Judicial remedies under the rules stated in this Restatement serve to protect one or more of the following interests of a promisee: (a) his "expectation interest," which is his interest in having the benefit of his bargain by being put in as good a position as he would have been in had the contract been performed, (b) his "reliance interest," which is his interest in being reimbursed for loss caused by reliance on the contract by being put in as good a position as he would have been in had the contract not been made, or (c) his "restitution interest," which is his interest in having restored to him any benefit that he has conferred on the other party.
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(2) Loss may be foreseeable as a probable result of a breach because it follows from the breach (a) in the ordinary course of events, or (b) as a result of special circumstances, beyond the ordinary course of events, that the party in breach had reason to know. (3) A court may limit damages for foreseeable loss by excluding recovery for loss of profits, by allowing recovery only for loss incurred in reliance, or otherwise if it concludes that in the circumstances justice so requires in order to avoid disproportionate compensation.
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